Top American Tour de France team says it'll have to shut down if it doesn't find $7 million in the next week

Cannondale-Drapac’s communications director, Matt Beaudin, and Slipstream Sports CEO Jonathan Vaughters watching the conclusion of stage nine of the 2017 Tour de France on TV in the back of their team bus.

The most popular American cycling team, Cannondale-Drapac,
was dealt a blow late last week when a promising sponsorship deal
for 2018 fell apart, team boss Jonathan
Vaughters has told Business Insider.

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As a result, Vaughters says, the team is $7 million short for
next year and will have to shut down unless it finds a new
sponsor or moneyed backer in the next week or so.

While the team is currently racing in the Vuelta a España and set
to finish this season as planned, next year is suddenly in
question. The team's riders would be without a team for 2018 and
its staff members would be without a job.

Vaughters said the riders were freed from their contracts over
the weekend and could look to ride for other teams. Yet he says
he's hopeful that, somehow, the money will come.

"If some company or someone wants to come forward in the next
week, then they can save the only team that sends Americans to
the Tour de
France," Vaughters said. "And if not, then by Christmas this
year Slipstream Sports LLC would no longer exist as a company."

Ellis and Vaughters started Slipstream in 2005 as a "clean team"
whose stated mission was to compete at the highest level of the
sport without doping.

Cannondale-Drapac was the only team at this year's Tour with
American riders.

"It was a done deal - I mean, I thought we had an agreement,"
Vaughters said by phone from Colorado, where Cannondale-Drapac is
based. "We were deciding on uniform design and how the bus was
going to look. But the agreement always had this clause that
said, unless there was unanimous consensus at the board of
directors meeting, the agreement could be terminated. We always
knew there was a risk, and in the end consensus was not
unanimous."

The news has stunned cycling. Besides being one of the sport's
most popular teams with stars like Taylor
Phinney and Rigoberto
Urán, Cannondale-Drapac had its best Tour de France this July
after Urán won a key stage and finished second overall, less than
a minute behind Chris Froome. Other highlights included a stage
win at the Tour of California and the Giro d'Italia and a podium
appearance at Paris-Roubaix. During the Tour the team announced
it had landed a
new sponsorship deal with the Verizon-owned digital-media company
Oath. Also at the Tour, Vaughters told Business Insider he
had "superstrong
leads" for new sponsorship and was hopeful one of them would
work out.

Cannondale-Drapac has become known as
cycling's "Moneyball" team, in reference to the baseball
best-seller. His organization has an annual budget of about $15
million, about one-third that of Froome's Team Sky. That has
meant he has had to find undervalued riders with untapped
potential whom he can afford to sign and who could win races.
Urán, the team's only million-dollar athlete entering the Tour
this year, recently renewed with the team on a lucrative
three-year contract, but now his future, like that of all the
riders, is uncertain.

Sources told
Cycling Weekly that the company that pulled out of the
sponsorship deal with Cannondale-Drapac at the last minute was
the online betting website Unibet, the cycling site reported
on Sunday. Unibet had previously sponsored a cycling team
(coincidentally, it was
one of the first teams Urán had raced with when he moved to
Europe, in 2007, the same year Ellis and Vaughters launched Team
Slipstream).

caption

No rider has finished closer behind Chris Froome at the Tour de France than Cannondale-Drapac's Rigoberto Urán, who this July ran runner-up to Froome by 54 seconds after three weeks of racing.

source

Bryn Lennon/Getty Images

'This is no crying wolf - we've got 10 days from today'

Vaughters said the team already had "$10 million locked up for
next year, committed." That $10 million is made up of roughly a
third from Cannondale, a third from Drapac, and a third from
Oath, with "some odds and ends" making up the last million.

"But we can't do the team on $10 million," Vaughters said. "Our
operational expense is $4 million, then your rider payroll is $10
million on its own. We needed at least $15 million or $16 million
to get through, and we came up with $10 million. We needed that
last $5 million, which would be the cheapest naming-rights
sponsor in all of cycling. We needed that last $5 million, and it
just fell through.

"This is no crying wolf - we've got 10 days from today,"
Vaughters said Friday, "to either do it or pull the pin. It
doesn't mean we need a $7 million check or whatever by tomorrow.
I mean, we're fine till the end of the year. But we just can't
run anything in 2018.

"You know, people ask, 'Why don't you just keep looking for a
sponsor all the way till November?' But the reason for that is
it's not fair to the riders. So I just keep all these guys locked
up, right? Then in November I come up with a goose egg, then
it's, 'Oh, OK, sorry - you guys are released from your contract.'
They'll be, like, 'Well, how am I going to find a job now in
November? All the positions are tied up.' So to be fair to the
athletes I have to call all this, you know, very soon."

The team said on its website over the weekend that it was setting
up a public fundraiser so that it could try to
save its 2018 season. Vaughters told Business Insider in a
follow-up call on Monday that he was exceedingly pleased with the
initial interest from the public, in both financial and moral
support.

"Unfortunately, you know, if you're a French team, you could do
that, because you'll get invited to the Tour de France," he said.
"It's like that new Vital team - it's like an $8 million budget.
But they'll run a single program, not doing two races at the same
time and all that. They won't be WorldTour, and they'll still get
invited to the Tour de France, because they're French.

"Whereas if you're an American team, if we were a pro continental
team, I don't think we'd get invited to the Tour. I mean,
maybe if we had Rigo under contract - maybe.
That might be the kicker, but you can't count on that. And all
the sponsors who have to sign off on that 'maybe, maybe not,'
well, you know.

"It just doesn't make any sense," Vaughters said. "We just had
our best Tour de France ever. We really need somebody to step
up."

Below are excerpts from an email that Vaughters sent on Friday.

Everyone:

Apologies for the mass email, but all of you on this list
have either helped Slipstream Sports (Team Cannondale-Drapac) or
have considered helping us out at one point or another. Thank you
for that support; it's what has kept us going for over a
decade.

However, unfortunately, I have some very bad news concerning
the team. This morning we were notified by a very promising
potential partner, that they would be unable to complete the
deal, due to dissenting opinion on their board of directors. As a
result, we were unable to finalize a naming rights sponsorship
deal with them for 2018. Very disappointing, considering
finishing 2nd in the Tour de France and winning stages in both
the Tour de France and Giro d'Italia. Our being unable to
finalize a naming rights deal means we will not be able to
continue as a team in 2018 or in the future. Instead we will need
to wind down and end Slipstream Sports LLC, if nothing changes in
the current situation. [...]

This is also very sad news for all of you who have helped us
in the fight against doping and for the rights of clean athletes.
We were the team that index tested the biological passport. We
were the first team to promote open and transparent conversation
regards doping and how to prevent it. We were the first to be
honest about the topic. And that now stands at risk of being
lost. [...]

For over a decade, despite our shrinking athlete payroll and
increased financial demands, we were able to take on, and often
beat, teams with over $40MM at their disposal. We were, and still
are, incredibly proud of being able to confront these financial
Goliaths - and - occasionally show them that it isn't always the
size of the dog in the fight, but the size of the fight in the
dog. 2017 was our best year ever, coming very close to winning
the largest race in the world with a rider no one would have
given a 1/1000 chance of winning at the start.

Sadly, we are now in our last fight. And that's our fight for
existence. If any of you can think of any solutions or any party
that wants to financially rescue this team, we are ready and
willing to keep on with the good fight, and find the next,
unexpected, Tour de France winner. I've attached a small
presentation for you to send on to any interested parties. We
have about 10 days left before we have to definitively turn the
lights off for good.

Thank you all for everything you've done. Thank you for
taking the time to read this note. And thank you for giving this
one last push.